WASDE - Cotton

COTTON: The U.S. 2012/13 cotton supply and demand estimates include larger production and

ending stocks compared with last month. Production is raised 651,000 bales to 17.7 million, up

nearly 4 percent, based on USDA’s first crop survey. Domestic mill use is unchanged. Exports

remain forecast at 12.1 million bales, despite the larger supply, due to reduced import demand by

China. Ending stocks are now forecast at 5.5 million bales, equal to 35 percent of total use. The

range for the marketing year average price received by producers is narrowed 1 cent on each end

to 61 to 79 cents per pound.

This month’s world 2012/13 cotton estimates also show larger supplies and ending stocks.

Beginning stocks are raised nearly 2.0 million bales in China as a result of adjustments to 2011/12

which both increase imports and reduce consumption. The higher China stocks are partially offset

by lower beginning stocks in Australia, Malaysia, Pakistan, and others, resulting in a net global

increase of 1.1 million bales. World production is raised 300,000 bales, as increases for the United

States, China, Burkina Faso, and Mali are partially offset by lower production for India, Brazil,

Argentina, and others. World consumption is reduced 820,000 bales, due mainly to reductions for

China and Pakistan. World trade is reduced slightly, as lower imports by China are partially offset

by small increases for several countries. World stocks are raised to 74.7 million bales, including an

increase of nearly 2.4 million bales in stocks held by China; lesser increases for the United States,

Pakistan, and Uzbekistan are about offset by decreases for India, Australia, and Brazil. Projected

China stocks of 34.2 million bales account for 46 percent of the world stocks forecast, and assume

a net increase in China’s national cotton reserve of about 20 percent during 2012/13.

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